With the Tribune Company nearing the end of its interminable bankruptcy and Peter Liguori poised to become its new CEO, the question arises of what he will do with the reborn media company.
From what my sources tell me, most likely he will oversee much of its dismantling.
An insider close to Tribune leadership tells me that Liguori has for some time been designated as the CEO-in-waiting, reporting to Edgar Lee of the private equity firm Oaktree Capital Management, the creditor who is now running the show.
They have a plan, I'm told. "They're going to liquidate as much as they can," said this senior insider.
On Friday, the Federal Communications Commission signed off on waivers needed to transfer Tribune Co.'s broadcast properties to new ownership, the final major hurdle before the company can emerge from nearly four years in Chapter 11.
Current Tribune CEO Eddy Hartenstein released a statement to the Chicago Tribune saying the company is expected to emerge from Chapter 11 "over the course of the next several weeks."
Once that happens, Liguori is expected to be formally named. And then?
My insider suggests that the newspapers, particularly the "crown jewel" of the company -- The Los Angeles Times -- will be on the auction block.
Tribune comprises nearly a dozen newspapers, including The Times and Chicago Tribune, and 23 local television stations and radio stations.
As a standalone proposition, The Times is still a profitable entity, according to this executive. But like print newspapers across the country, its overall revenue is in steady decline. Buyers for print properties have proven to be few and far between of late.
Still, with about $50 million in profit expected this year, an expected sale price would be about $200 million, according to my insider. That represents a shocking decline from what the newspaper could have commanded just five years ago when David Geffen offered $2 billion for the property in 2007. Tribune, then run by Sam Zell, declined.
Thus goes the fate of newspapers. (And no, the L.A. Times real estate is not worth as much as its locations might suggest, with huge environmental and zoning issues involved in any repurposing, according to another informed source who has looked at them.)
Liguori is a television executive, having come from building FX into a significant cable presence, before being promoted to run entertainment at Fox (where he was bumped in 2009).
He then went to Discovery as COO, where he was meant to help launch Oprah's new channel OWN. Oprah took that endeavor over as CEO in mid-2011, and Liguori left Discovery last December.
Liguori's resume suggests that Tribune will focus on its television channels, which are also the largest source of revenue for the $3 billion company, although my insider says some of those channels are also likely to be sold.
The new ownership group comprise senior creditors Oaktree Capital Management, Angelo, Gordon & Co. and JPMorgan Chase & Co.
Their view of Tribune? "It's not a big growth play," said the individual. "This is a private equity fund. They are interested in maximizing the value and getting out."
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- Peter Liguori
- Oaktree Capital Management
- Chicago Tribune
- the Tribune Company